Correlation Between Veralto and YY Group

Can any of the company-specific risk be diversified away by investing in both Veralto and YY Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Veralto and YY Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Veralto and YY Group Holding, you can compare the effects of market volatilities on Veralto and YY Group and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Veralto with a short position of YY Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veralto and YY Group.

Diversification Opportunities for Veralto and YY Group

-0.4

Correlation Coefficient

Veralto  YY Group

Very good diversification

The 3 months correlation between Veralto and YYGH is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Veralto and YY Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YY Group Holding and Veralto is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Veralto are associated (or correlated) with YY Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YY Group Holding has no effect on the direction of Veralto i.e., Veralto and YY Group go up and down completely randomly.

Pair Corralation between Veralto and YY Group

Given the investment horizon of 90 days Veralto is expected to generate 0.22 times more return on investment than YY Group. However, Veralto is 4.64 times less risky than YY Group. It trades about 0.06 of its potential returns per unit of risk. YY Group Holding is currently generating about 0.0 per unit of risk. If you would invest  8,021  in Veralto on October 22, 2024 and sell it today you would earn a total of  2,273  from holding Veralto or generate 28.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	56.8%
Values	Daily Returns

Veralto  vs.  YY Group Holding

Veralto

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Veralto has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

YY Group Holding

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in YY Group Holding are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical and fundamental indicators, YY Group demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Veralto and YY Group

The main advantage of trading using opposite Veralto and YY Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veralto position performs unexpectedly, YY Group can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in YY Group will offset losses from the drop in YY Group's long position.

The idea behind Veralto and YY Group Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Share Portfolio module to track or share privately all of your investments from the convenience of any device.